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Healy Lake chief charged with theft of tribe's funds while abandoning village

A Fairbanks woman at the center of a contested Interior Alaska tribal feud has been charged in federal court for theft of government funds, embezzlement and theft from a tribal organization. A small group of opposing Healy Lake tribal leaders say Joann Polston strong-armed her way to the tribe's top spot, then abandoned the small hamlet, shuttering its few facilities.

On May 22, the government filed a two-count indictment against Polston alleging that between about 2009 and 2012 -- as first chief and tribal administrator of the Healy Lake Tribe, also known as the Mendas Cha-ag Tribe -- she paid herself up to $56,000 from the tribe's accounts on top of a salary between $36,000 and $43,000.

"In her dual roles as First Chief and Tribal Administrator, Polston bypassed internal controls related to the handling of the tribe's funds," the indictment says. "For example, Polston frequently wrote checks to herself from the tribe's accounts without a signature from any other member of the Traditional Council and directly transferred money to her personal bank account."

Counts one and two re-allege information contained in the federal affidavit about the transfer of tens of thousands of dollars from the tribe's accounts. Additionally, the first charge alleges the theft of a per diem payment of $4,500 from the Bureau of Indian Affairs for a trip she'd already been paid for; the second charge claims she wrote herself $15,000 in checks from the tribe's accounts.

The indictment offers no details about how the money was spent. But members of an opposing group, who claim to be the rightful leaders of Mendas Cha-ag, argue problems started in Healy Lake in 2005.

Depending on the source, four to a dozen people live in the rural village situated around Healy Lake, southeast of Fairbanks. It's accessible by plane or boat in the summer, snowmobile in winter. The town's inhabitants have been living in the area for more than 11,000 years, according to planning documents from the separate Mendas Cha-ag Native Corporation, and are used to subsisting off the land.

However, Ray Fifer and Gary Lee said Healy Lake has fewer amenities than in the past. The two men are the respective first and second chiefs of the opposing group. The town was largely abandoned as Polston failed to care for it, Lee said. The village school, washeteria, medical clinic and tribal offices are boarded up, Fifer said. Inside the buildings, documents and junk are strewn on the floors, they said.

"People had no other choice," Fifer said. "Villagers had to move away to put their kids in school."

Polston took power in 2005 after her brother stepped down as first chief. Neither Fifer nor Lee knows exactly when Polston set up shop in Fairbanks, but they said she's run the village from afar since a year or so after her self-imposed election. A federal affidavit indicates Polston was served her charges at a residence on 25th Avenue in Fairbanks on May 23. Calls to Polston and her attorney were not returned as of Tuesday.

Healy Lake Tribe's constitution and ordinances provide for yearly elections. Five council members are supposed to serve two-year staggered terms. The five members are elected and decide among themselves what positions each will fill. Fifer said that after Polston assumed power in 2005, an election did not occur until April 2012 as Polston opposed giving up her position.

Lee said tribe members were afraid to oppose Polston, fearing retaliation.

"The bottom line is Ms. Polston for seven years, when she was chief, suspended the tribal constitution and refused to hold an election," said Fairbanks attorney Michael Walleri, who represents the Fifer group. "During that time, people started calling for elections and became aware of missing and misappropriated money she was in charge of. There's about $1 million missing. We simply don't know what happened to it."

In January 1995, according to Fifer, the tribe decided to hold an election after years of inactivity, but a membership list hadn't been maintained for nearly two decades. The tribe decided to fix the problem by using the "tribal roll" established under the Alaska Native Claims Settlement Act, he said, and the same was done two years later to determine new members' lineage.

Since Polston's rise to first chief, she has replaced and rearranged the tribe's council members, according to Lee. She also added more than 100 members to the tribal roll, he said. Fifer said there are around 50 members while Polston claims there are more than four times that number.

Fifer and company took major action against Polston in April 2012 when they held an election under the observation of a Bureau of Indian Affairs Fairbanks office superintendent Kathy Cline and Tanana Chiefs Conference staff, according to an Alaska Superior Court affidavit. Their aim was to regain authority of the tribe's bank accounts.

The election ended in new leadership, but the victory was short-lived. The new group informed Mt. McKinley Bank, where the tribe's funds are located, of the change and sought access to their funds with Cline's help.

Cline sent a letter to the bank certifying the leadership's validity, stating "The Bureau of Indian Affairs lawfully recognizes the following elected members (the Fifer Group) to conduct official business on behalf of the Healy Lake Traditional Council," according to the Superior Court affidavit.

However, Cline rescinded her letter three days later, writing the BIA did not have the authority to certify the tribal election.

Fifer contends Polston convinced the bureau that his group was a small contingent of disgruntled tribe members. Numerous inquiries to the bureau resulted in no comment; Fifer said the bureau is finally helping mediate the leadership problem due, in part, to Polston's federal indictment, though the process is moving slowly.

Polston held her own election later in May 2012, arguing her opposition's dispute over the tribe's enrollees was unwarranted, according to the affidavit.

"(The Fifer Group's) count of Tribal members is much smaller than the actual Tribal membership," the Supreme Court affidavit quotes Polston from a previous court filing.

She was re-elected first chief two months later. The affidavit indicates the election was certified by a tribal election committee, and the certification form contains spaces to insert the number of undisputed adult members present at the election, but they were left blank, according to the affidavit.

When Fifer and Lee request to see the tribe's membership records, they say Polston claimed her office was ransacked and the records cannot be found.

The opposition sued the bank after its access to the funds were cut, but Mt. McKinley bank argued the matter of leadership revolved around tribal self-governance, and the state's Superior Court agreed.

Still, the theft charges are a turning point, Lee said. "It puts us at a point where we can convince people that a valid council was elected and we should have control over the dissemination of BIA funds. "The federal indictment covers a small portion of what's gone on," Lee said. "In my view, Polston is responsible for some very damaging things."